1. The goal of every economy is to grow as fast as possible.

True or False

2. GDP is the most important measure of a country's economy.

True or False

3. GDP is comprised of four components. C + I + G +Xn

Match each letter in the GDP formula with its description.

ANSWER CHOICES:

a. Spending on national defense, the police, and fire trucks.

b. Spending on equipment and machinery.

c. Spending on food, clothing and tires.

d. Selling items produced within the United States to other countries.

QUESTIONS:

1. Consumer Spending

2. Investment Spending

3. Government Spending

4. Net Exports

4.Which component of the GDP formula represents the largest spending category.

a. Consumer

b. Net Exports

c. Government

d. Investment

5. Investment includes all the spending in the stock market.

true or false

6. The idea that a country's GDP goes up an down over a period of time is called _________________ .

a. GDP Formula

b. Inflation

c. Government inefficiency

d. the Business Cycle

7.

ANSWER CHOICES:

a. Trough

b. Expansion

c. Contraction

d. Peak

QUESTIONS:

1. Unemployment is high, interest rates are high, and many businesses are not investing, but real GDP is no longer falling.

2. Business production is down and unemployment is rising. Real GDP has been falling in recent months.

3. Unemployment has been dropping and businesses are doing well. Real GDP is experiencing a long-term increase.

4. Business is doing well and unemployment is low, but real GDP is no longer rising.

8. Gross Domestic Product (GDP) measures the "market value" "$" of all final goods and services produced in an economy in a year.

Good	Number Produced	Price Each	Revenues
Shoes	120	$20	$2,400
Shirts	100	$12
Shovels	160	$10
Books	200	$8

If the table above represents a country's annual production, calculate its GDP.

a. none of the above

b. 580

c. $6,800

d. $140

9. If the population of the country in the table is twenty individuals, then what is their GDP per capita?

Good	Number Produced	Price Each	Revenues
Shoes	120	$20
Shirts	100	$12
Shovels	160	$10
Books	200	$8

a. 48.33

b. $11.67

c. $340

d. none of the above

10. Which of the following items would not be included in a nation's GDP?

a. Automobiles produced within a nation's border

b. Cleaning your own home on the weekend.

c. none of the above.

d. Lawn Masters mows your lawn for $50.

11. Directions: For each itemplace either an "I" if the scenario is an intermediate product, or an "F" if it is a final product. answer choices

a. F

b. I

c. none of the above

1. Shampoo is bought and used by a hair stylist in the mall.

2. A family buys some finger paint for their child to use.

3. A person buys a tire to replace to flat one on their car.

4. A hotel chain buys a box of pens.

5. Flour is bought and used to bake a cake to be sold at a bakery 6. Someone buys a steak to grill at home. 7. An accounting firm buys calculators for its accountants. 8. A person buys shampoo to use at home.

9. Flour is bought and used to bake a cake for a birthday.

10. A student buys a pack of pens to do their homework.

11. A restaurant prepares a steak for its customers. 12. A factory buys tires to place on their cars. 13. An artist buys paints for a painting, with the intention of keeping it.

14. A calculator is bought and used for mathematics homework. 15. An artist buys paints for a landscape painting, with the intention of selling it